Market Morsel: What should you plant?
Seeding, planting, or drilling, whatever you want to call it, the total mobilisation of seeding rigs is almost upon us.
Many cropping areas have solid moisture profiles and will give a bit of confidence for the coming season. All going well; weather permitting, we are set to have an average to above-average national crop.
One of the questions we get asked more often than any other at this time of year is “What should I plant?”.
I could go through a whole bunch of modelling and show all sorts of economic reasons to choose one crop over another. However, it is far simpler than that, and it is not to do with price.
First and foremost, the best risk management solution for your crop is to plant what is best for the paddock. It is agronomics that should take priority in the decision.
Yes, there may be a discussion about what crop is going to have the best price etc. However, the reality is that the price at present is just that. It is the current price. Most farmers are not going to lock away large portions of their pricing at seeding, and nor should they.
The price at harvest can be very different from the price at seeding. A huge number of factors influence pricing, and with 7-8 months until seeding, a lot can change.
A commodity with a good price can end up with a poor price at harvest (and vice versa). Also, if everyone chose their planting based on price, then we’d see too much supply.
The charts below show the average spot price at seeding vs the spot price at harvest for wheat and barley. As we can see, there is a large degree of change between seeding and harvest.
At this point, let’s hope for a great harvest here and overseas issues to pump our pricing up.